Are premium brands resistant to the competition? Does the need to adapt to the market not apply to luxury goods?
The basic feature of luxury products is that they are not essential. Often not needed at all. And yet they sell and can make the brand profitable!
We should, of course, distinguish premium from luxury products. The former are “improved” standard products, often supplementing the offer to broaden the group of customers, while the latter are aimed at a selected group of buyers. In principle, they do not have to significantly deviate from the standard in quality, usually, the determinant here is the appropriate logo, price, and very limited availability. In a word – uniqueness.
There is a group of brands that have regular followers. As soon as there are new products, versions, or models, there is a queue of people interested in having them.
Currently, however, even this market sector is unable to withstand the growing dynamics. Customers change preferences, competition is adapting to them, and the number of new, aspiring brands is also growing, which will be willing to take over some customers, creating new, previously unknown needs and appetites. Hence, also here there is a need to revise the manner and place of advertising the goods, learn about the realities of prices and ensure visibility and “good press” for your products and services.
Stationery or online?
Premium products naturally entered the e-commerce world with their standard counterparts. The luxury goods market, until recently, limited to elegant salons with competent concierges, also had to change its location a bit. This was due to the entry into the purchasing market of young, digitally-oriented people with greater environmental awareness. The limited mobility of customers during the pandemic also played its role.
So it is a sign of the times that most of the market, including B2B, if not exclusive, is at least equally shifting online. Most of the customers are here, so manufacturers and distributors also focus their marketing and sales efforts here.
How to define optimal online activities?
As in the case of standard goods, the basis is to monitor customer behavior, but also competition, trends, and motivating factors for potential buyers.
What needs to be monitored?
First of all, you need to determine where your target customers are, what they are looking for and what product features are important to them. To find out, marketers follow:
- what elements do customers emphasize in their opinions about the products and the brand
- what products and where the competition is advertising
- what features of the products are emphasized by the competition in their message
- in which channels on the shelf of our assortment, do other brands’ products appear
How to use the data?
Armed with the knowledge above, of course properly collected and analyzed, we can apply our communication with customers, reducing the costs of unsuccessful marketing campaigns or product placement in inappropriate channels, both those where our potential customer does not look, but also overcrowded with competitors’ products.
Therefore, using the collected information, we can, among others:
- define the right channels and niches for presenting and selling our products
- select the most profitable places and ways to advertise them
- adapt the language of advertising, influencer materials, videos, and instructions, to the content communicated as desired by customers
- adapt the content of product descriptions, photos, and product data to the customer’s indications
- improve the methods of collecting opinions, encourage reviews after the purchase
- emphasize the differences from the competition, to build a unique value proposition for our brand
What about the prices?
In the case of luxury goods, prices are set on a completely different basis than for other products. Here, the only criterion is to create the uniqueness that someone will want to pay for. Price wars in such cases can only damage the luxury of brands. However, observing the latest trends, some brands, so far renouncing from the common market, begin to bow more and more often to mass customers and launch product lines sold even in supermarkets! Is this another sign of the times?
When it comes to premium brands, they have long followed similar rules as standard ones. Customers are willing to pay more, but typically have more than one kind of product to choose from. Therefore, it becomes necessary to monitor the prices of competitors and appropriate positioning of own prices about them. In the world of e-commerce, even if one premium brand dominates a store, it ceases to be a cost or an obstacle for a customer, in reaching the next store to verify the profitability of the purchase. Therefore, it is necessary to ensure the competitiveness of the offer, as the loyalty of buyers of goods from this shelf is limited.
The modern dynamic e-commerce market, where in many segments the supply often exceeds the demand, forces the use of similar marketing and sales procedures for standard and premium goods, and partly also for luxury products.
For such activities to be effective, you cannot rest on your laurels, count on customer loyalty and recommendations. You have to observe and analyze their preferences, follow them where they are most often, and, of course, keep an eye on the competition. Changes happen so quickly that it becomes very difficult to find a comfortable beachhead for a long time.